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Photo: Amy Osborne, Special To The Chronicle

Robert Gnaizda, attorney for the National Asian American Coalition, says Kamala Harris is letting politics guide her actions on the mortgage settlement.

A major message in Attorney General Kamala Harris’ U.S. Senate campaign is that after the foreclosure crisis hit in 2008, she “fought the big banks” and won $20 billion in 2012 for California homeowners.

But Gov. Jerry Brown and the Legislature illegally raided $331 million from that settlement in 2012 to plug a state budget hole. Now some housing advocates say Harris isn’t using her prominent voice strongly enough to get that money back to help millions of California homeowners who are still struggling.

“If I were Kamala Harris, I’d fight for the people — not for Gov. Brown,” said Faith Bautista, executive director of the National Asian American Coalition, a Daly City organization that provides free counseling for homeowners with financing problems. The money in the settlement fund was designated for foreclosure relief, aid to homeowners and other housing-related purposes.

President Obama starred in a TV ad for Harris’ Senate campaign this month, saying that she was “fearless” in squeezing money from the lenders. But Bautista wishes Harris would be more vocal in using her prominent position to get the money back faster.

“She needs to take it all the way home,” said Bautista, who intends to vote for Harris, nonetheless.

Photo: Amy Osborne, Special To The Chronicle

Homeowner Amy Macaraeg speaks with housing counselor Paula Canfil (right) at the National Asian American Coalition office in Daly City on Friday, Oct 28, 2016. Through the efforts of the NAAC, Macaraeg’s loan was modified and interest rate lowered so she was able to keep her home of 23 years.

Part of the money in the settlement fund goes to groups like the National Asian American Coalition. Bautista said that since 2008, the federally approved organization has helped 9,500 people negotiate with lenders to allow them to stay in their homes.

“We know 700 families we could help with that mortgage settlement money,” she said. “Now that California’s budget is (balanced), just give it back.”

But that might not happen for years, if ever.

Even though Sacramento County Superior Court Judge Timothy Frawley ruled last year that the state is “obligated to restore” the money to the mortgage fund, some struggling homeowners might not get help until it’s too late, because the case is bogged down in an appeals process that could take years to resolve.

Harris’ office would normally represent the state in a lawsuit of this type, but didn’t in this case because it would have been a conflict of interest. Instead, the state hired the Remcho, Johansen & Purcell law firm, which has charged $594,994 in fees as of Sept. 15, according to the California Department of Finance.

Robert Gnaizda, attorney for Bautista’s organization, estimates that it could be mid-2018 before the case is decided.

He said that politics is playing a role.

“Gov. Brown is doing a smart thing politically — even if I don’t agree with what he’s doing,” by continuing the appeals, said Gnaizda. “He’s going to leave it to our new governor.” Brown is termed out in 2018. Gnaizda served under Brown in his first term as governor in the 1970s as the state health director and has also been an economic adviser to Brown.

H.D. Palmer, a spokesman for the Department of Finance, disagreed, saying “politics are in no way involved in this decision.”

As for Harris, Gnaizda said she “will be a very good senator. And she’s been a good attorney general. But she’s also a politician.”

Noting that Brown endorsed Harris for Senate to replace retiring Sen. Barbara Boxer, Gnaizda said that Harris’ reticence is rooted in political expediency, because she didn’t want to incur the “wrath of Brown while she was running for the Senate, while it appeared there was a reasonable chance that (opponent Democratic Rep.) Loretta Sanchez could beat her.”

But Harris dismissed Gnaizda’s claims as “ridiculous,” in part because the timing doesn’t make sense. Boxer announced in January 2015 that she would not seek another term, after the suit had been filed. Brown endorsed Harris in May 2016, just two weeks before California’s primary.

“Until Barbara announced, did anyone know that she was going to retire? Absolutely not,” Harris said before a recent campaign stop in Bakersfield. “That’s ridiculous.”

Harris said she “was livid that the money was taken (from the settlement fund), and we fought to not have the money taken” by the Legislature. She said lawmakers took the money when the state was staring at a major budget deficit, “so everyone had to take some pain.” And, she points out that she helped create the California Homeowner Bill of Rights, one of the nation’s tougher set of housing protections enacted after the crisis.

Bautista said she and her organization have had several meetings with Harris’ office about getting the money restored.

“They’re all sympathetic. They agree with us. But they say the law is the law.” Bautista said. “I say, forget about the law. We already won” the legal case.

Harris said “I agree, and I share the frustration, and we have been trying to get it back.”

Harris pointed at the Legislature. “We need to talk about the people who took the money, and hold them accountable.”

Gnaizda hasn’t found any Democrats, who control a majority of both houses in the Legislature, who seem interested in returning the money.

Meanwhile, Sanchez has been mentioning the dispute as part of her critique of Harris’ work on the mortgage settlement, saying it was overrated. At a news conference in Los Angeles last week, Sanchez chided Harris for not doing more to get the settlement money back. She was joined by homeowners hurt during the foreclosure crisis.

“She claims to be fearless, but she was a reluctant follower” of Brown and the Legislature in letting them take the money, Sanchez said.

While lawyers and politicians fight over the money, homeowners like Amando Melano remain in limbo.

The 66-year-old started having trouble making payments on his Daly City home several years ago. Melano lost the receiving clerk job that he held at a Hayward warehouse for 30 years, and then his wife lost hers at the same facility.

They were able to hold on to their home by renting out a room to his brother-in-law and Melano’s part-time job in a postal warehouse.

But they were falling behind on payments, and he found himself confused by the bureaucratic challenges of trying to persuade his lender to adjust their payments. A few months ago, Melano got help from Bautista’s counselors, who were able to get his payment adjusted to $3,200.

“All I want to do is stay in my house,” Melano said. “Now I think I can. I hope.”